The male-female wage gap narrowed considerably during the 1980s and 1990s, thanks to increased educational attainment among women and an influx of women into high-earning fields. Factors such as the Women’s Movement and the 1964 Civil Rights Act are often cited as the drivers of this shift, but economists are also narrowing in on another influence: the Pill. Economists have linked the Pill to “delays in marriage (among college goers) and motherhood, changes in selection into motherhood, increased educational attainment, labor-force participation, and occupational upgrading among college graduates.”Now in a new NBER working paper Martha J. Bailey, Brad Hershbein and Amalia R. Miller look at The Opt-In Revolution? Contraception and the Gender Gap in Wages:
Decades of research on the U.S. gender gap in wages describes its correlates, but little is known about why women changed their career paths in the 1960s and 1970s. This paper explores the role of “the Pill” in altering women’s human capital investments and its ultimate implications for life-cycle wages. Using state-by-birth-cohort variation in legal access to contraception, we show that younger access to the Pill conferred an 8-percent hourly wage premium by age fifty. Our estimates imply that the Pill can account for 10 percent of the convergence of the gender gap in the 1980s and 30 percent in the 1990s.The paper's results suggest that the Pill's power to transform childbearing from probabilistic to planned shifted women's career decisions and compensation for decades to come.